Why is Google willing to spend $1 billion to snatch Skybox?

Google is reportedly in advanced stages of discussion on the acquisition of Skybox for $1 billion.

Skybox, founded in 2009, is a small startup that specializes in taking very detailed pictures through satellite imaging. The company has also found success in commercializing its data for company revenue.

Acquiring Skybox will allow Google to improve its online maps service. Google currently uses several sources for its Google Earth, which provides real-world images as a component of Google Maps. Some of the sources are updated, while some are not. With Google acquiring their own source of quality satellite images, then Google Earth would become more accurate and reliable.

In addition what Skybox would bring to Google for personal users of Google Earth, the acquisition will also boost Google Earth Enterprise, which is a service that aims to provide mapping data to corporations. Google Earth Enterprise allows users within the company to access a database of maps and terrains within the company's own server infrastructure.

"A constellation of small imaging satellites, like what we already have in place today with RapidEye or what Skybox may have in the future, would give Google a very reliable, rich content source for imagery analytics and related applications," said Scott Soenen, CTO of BlackBridge, another satellite company.

Skybox was last valued at $500 million to $700 million during its last fundraising activity in 2012, when it was able to raise an amount of $70 million.

The deal, first reported last April, could also involve Planet Labs, another company that owns 28 satellites that they use to take pictures of the Earth. Like Skybox, Planet Labs focuses on images, videos, and data analysis.

There have been criticisms of why Google will push through with the acquisition of Skybox for $1 billion, especially after reports that say Skybox is running out of money to continue operations. In addition, there are several other companies that do things similar to what Skybox does, such as the aforementioned Planet Labs.

The proposed deal, if it pushes through, will come right after Google acquired Titan Aerospace last April, which is a company that specializes in creating drones that fly at high altitudes. Google made the purchase right after Facebook revealed that it planned to provide Internet services to previously unreachable places through the usage of drones.

In combination with the Titan Aerospace deal, purchasing Skybox could add also a hint of possibility to Google's interest in providing real-time imagery of the whole world.